TOKYO (Reuters) – A Hong Kong-based activist investor in Toshiba Corp has told the embattled conglomerate that the $18 billion sale of its chip unit to a Bain Capital-led group is no longer necessary after its recent capital injection, according to a letter seen by Reuters.

Argyle Street Management Ltd, a hedge fund with $1.2 billion under management, sent the letter to Toshiba’s board late on Monday, the fund’s chief investment officer, Kin Chan, told Reuters. The fund declined to say how many Toshiba shares it owns.

The first activist shareholder to openly voice opposition to the sale, Argyle is inviting the 30-plus overseas investors who participated in Toshiba’s recent 600 billion yen ($5.3 billion) new share issue to team up and is already in talks with at least three funds who share the same view, Chan said.

Toshiba agreed to sell Toshiba Memory – the world’s no. 2 producer of NAND chips – to the Bain consortium to cover billions of dollars in liabilities arising from its now bankrupt U.S. nuclear power unit Westinghouse.

In order to ensure its listing status, however, Toshiba also secured a $5.4 billion cash injection from overseas funds this month, which with tax write-offs gives it sufficient funds to cover its liabilities.

Argyle believes “there no longer is any urgency to undertake a sale of Toshiba Memory,” it said in the letter, which proposed a meeting with Toshiba’s board in either December or January.

The $18 billion price tag for the chip unit “significantly undervalues the business,” the letter said, adding that the board should consider instead an IPO for Toshiba Memory.

Representatives for Toshiba and Bain were not immediately available for comment.

While the potential for activist funds to hinder or even scupper the deal with the Bain-led consortium will depend on how many join forces in opposition, Argyle’s letter underscores some fears that Toshiba had opened a potential can of worms by tapping activist shareholders in its new share issue.